Cars manufactured before 1996 to be scrapped? To push new car sales?

This is a discussion on Cars manufactured before 1996 to be scrapped? To push new car sales? within The Indian Car Scene, part of the BHP India category; @ ACM,
Ensuring that the older cars are scrapped will be the biggest issue. Any loophole in the system that ...

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

@ ACM,

Ensuring that the older cars are scrapped will be the biggest issue. Any loophole in the system that helps people to get the incentive and sell the old car will be useless, the smallest loophole and it will be a lucrative grey market business.

Taxis/Autorickshaws could be first stage of the experiment. There are plenty who want to change/upgrade their vehicles but finances become a stumbling block.

All this is a long shot. The Govt taking any such initiative is a big question mark.

What you need to understand is, protection oriented policies would not fuel growth. It would only end up siphoning taxpayer's money. If indian auto industry dies, and everyone start buying Chinese cars, so be it. Customers benefit eventually.

Please try and understand that I am not supporting protectionism. However, economics demands that the consumerism exists, to stimulate manufacturing growth, that in turn stimulates employment, which stimulates consumerism. This is a full cycle. Moreover, if we start consuming more imports, we will further increase our trade imbalance, with say - China, and that would mean, that India would be giving up it's wealth to China.

The point I was trying to make, was for a balanced policy. One that favours Environment, customers and manufacturers alike, and still tries to protect the country's long term interests.

Kindly read my full post earlier.

Quote:

Originally Posted by Y@SH

I feel this would lead to an economic problem. What is inflation? It is caused because of high demand and less goods available. Why has government risen the interest rates? To reduce demand, so that it decreases and prices go back to normal. What will happen if people buy more cars after this suggestion passes, given the current economic scenario? Increase in Inflation.
Why? Because the more people demand for cars the more manufacturers demand for raw materials the more the demand the further increase in prices.

On the contrary I was advocating the necessity for a balanced view.
If this were to come to pass:
1. Manufacturers should be somehow made to compromise up on their high operating margins and
2. The Government should consider making the registration of such Car exchange transactions free or charged at nominal rate

So actually, this should in effect drive down prices, especially for those people who are trading in old junk.

Of course, Manufacturers would not willingly or unilaterally give up on their Operating margins, and hence this is where the Government should put it's foot down saying - "Guys if you want this proposal to go forward, then here is the discount that you must give to the customers, keeping the current offering intact, because you would be potentially receiving the same or increased amount of Income through your increased Sales".

Last edited by GTO : 13th October 2011 at 17:12.
Reason: Please use the EDIT or MULTI-QUOTE buttons instead of typing one post after another!

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

This is a retrograde step being initiated by the SIAM to serve their own selfish ends.The auto manufacturers body is a very strong lobby and power play group in the corridors of power since recent times. The SIAM has a lot of say in policy matters and also in the annual budget exercise. They are heard and their recommendations are given a lot of credence.
This is quite a changeover from the scenario about four decades ago, when every annual budget almost every year would raise taxes on cars, but the government would control their basic price.It meant that each truck/bus chassis, car, jeep, scooter or bike (any automobile basically) sold would have a price administered and fixed by the government.The manufacturers ultimately went to the Supreme Court and got the price control regime of the government axed around 1977. Suddenly prices of all automobiles went up.
The picture is quite different now.The SIAM has a lot of clout.Lets only hope that the pre-1996 automobile scrapping decision does not become a law.
The Maharashtra Government has likewise introduced the Green Tax w.e.f. October 31st 2010 which has to be paid by all private vehicles (Rs 3K for cars and Rs 2 K for two wheelers every five years) older than 15 and commercial vehicles older than 8 years.There were two cases filed in the Nagpur Bench of the Hon'ble Mumbai High Court against this decision but the cases have been dismissed as of now.
But the scenario in Maharashtra like elsewhere is that mostly the economically deprived people drive old two motor vehicles. Many others love their old motor vehicles and lug on with them. In the rural parts there are many old two and four wheelers everywhere. Even in cities a lower middle class or middle class family or even a daily wager depends on his old two wheeler. A retired person who bought a two wheeler or car just before his retirement cannot simply afford a new one in the present day. But even with such a backdrop, very few people pay the Green Tax and all the older motor vehicles are running.
All said and done, the scrappage move may also be suicidal for the government if implemented, as there are many cross currents and the decision makers may be caught up in a muddle or whirlpool and get stuck.The SIAM has nothing to lose as they will laugh all the way to their banks.The "aam aadmi" drives in old motor vehicles and for many this is a source of livelihood. And for the rulers to hang on to their power, they must be BEWARE of the "aam aadmi."

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

I think our market is not yet mature enough for suc legislation
We have much more to worry ourselves about - poverty, education, food, infrastructure etc.
I dont think this will come to pass in a hurry - I would venture to say we are atleast ten years away from being mature enough for such decisions to be made.
anyway, if they need to do this they need to begin with the ancient and creaky public transport vehicles first, then move to transport sector and then to the horrible little autos and bombay yellow fiat taxis and suchlike before they can even come near private vehicles.
the alternative is to simply reduce loan rates, reduce excise and other duties and thus cause prices to fall a bit and demand to rise a bit. But this will not get done in a hurry as our government wont let go easily of a good cash cow like excise and duties!

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

Quote:

Originally Posted by anky

All politicians above 50 should be scrapped and made to pay for their oown cars and the expensive 4x4 suv's they travel in as status symbols which the pay for with ill gotten gains.

It is obvious that such a proposal will never work in India, and would only lead to more corruption. People would find ways to convert their private vehicles to taxis, and then run it like nothing has changed.

But I would like to know why archaic buses, lorries and taxis are spared Do they help reduce pollution?

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

From what I think, it is the worst idea one can come up with. There's logical flaws in the idea itself.

1> Safety: If there's true concern about safety then all new cars should have airbags mandatory, irrespective of its variant. Also cars older than 1996 are safer than a nano or 800 or a 2 wheeler (no offence to nano or 800 or 2 wheeler owners). So either you remove safety as a reason for scrapping the pre-96 cars or start scrapping nano's, 800's and 2-wheeler's too!

2>Pollution: Well if there's serious concern about pollution then I think selling of diesel cars should be banned as they cause more pollution! That is as unreasonable as the SIAM's idea and i know it! More reasonable would be reviewing petrol and diesel prices; taxing diesel more and de-taxing petrol, also different pricing of diesel for commercial vehicles to keep down inflation.
Also the Govt. has a pollution policy. Everyone of us does a pollution check of our cars every 6 months. Its mandatory for all cars including those before 1996. Certain requirements are set and if they are met with, then the car's fit for the road. So the set standard should be reset if there's concerns of pollution.
Also I've seen many not-too-old cars, some as new as 2008-09, that's not been maintained and producing black smoke, while there're cars way older than 1996 that have been maintained in pristine condition.

So scrapping cars based on its year of manufacture is as baseless as it can get! Its like saying 'More the CC of a car, the more powerful it is!!'

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

There are few questions to be answered by SIAM

1. How does seller get benefited by junking his car ?
2. What about vintage cars ?
3. Where does the junk go , who buys it , where is it disposed ?
4. Why does it apply for domestic car, what about state transport buses , trucks etc ?
5. How will infrastructure and public transport get benefited ?

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

Many countries have a system of yearly renewal of permit. Where the condition (including emissions) of the car is inspected. Such a system needs to come into effect in long term.

At the same time I see no reason why the vehicles without atleast bs1 emission standards should not be scrapped, or not allowed to ply on the roads. This is a good recommendation.

The air is so polluted that people like me suffer from respiratory problems every day of my life. And those who dont feel the effects currently, please note that the cumulative effects will take a toll on your health in future. When we have banned smoking in public places, why not scrap "heavily polluting" cars?
Some people spoke of sentimental values. No one says that you should not keep the cars inside your house. Just dont bring it outside on the road.

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

Quote:

Originally Posted by mxx

Many countries have a system of yearly renewal of permit. Where the condition (including emissions) of the car is inspected. Such a system needs to come into effect in long term.

Quote:

Originally Posted by mxx

At the same time I see no reason why the vehicles without atleast bs1 emission standards should not be scrapped, or not allowed to ply on the roads. This is a good recommendation.

The air is so polluted that people like me suffer from respiratory problems every day of my life. And those who dont feel the effects currently, please note that the cumulative effects will take a toll on your health in future. When we have banned smoking in public places, why not scrap "heavily polluting" cars?

The yearly permit renewal system is very logical but scrapping cars based on year of Mfg. or BS1/2/3 is just illogical. Its like saying let a BS IV Indica throwing thick black smoke ply on the road just because its BS IV whereas you scrap a very well maintained and less polluting Fiat Padmini or even an esteem just cos they are not BS I or they are old! It just defies simple logic.

We all know old doesn't always mean polluting vehicles and new doesn't mean non-polluting vehicles. It all comes down to vehicle maintenance.

The thing is plain and simple: Scrap 'polluting vehicles' not 'old vehicles'.

re: Cars manufactured before 1996 to be scrapped? To push new car sales?

Something like this happened in Kolkata.
According to Kolkata HC - commercial vehicles more than 15 years old should cease to ply. I guess that suing and counter suing is going on now.
Also - there is a pretty successful story in scrapping of old autos when the owner gets a new LPG auto (sweetened with some government grants and low interest loans).
But on the other side of the story - cash for clunkers actually destroyed many good running cars in US, and thus pushed up the price of cars in used car market.